New Vehicle Sales Drop by 80%

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  • New Vehicle Sales Drop by 80%

The total number of new vehicle sold in Nigeria may not exceed 10,000 units at the end of the year, dropping from 50,000 units before the introduction of a new automotive policy in 2013.

Local automakers and dealers stated this in Lagos on Tuesday and gave low purchasing power due to the economic crunch, scarcity of foreign exchange and high interest rate as some of the factors responsible for the 80 per cent drop.

They spoke at the 2017 symposium of the Automobile and Allied Services Group of the Lagos Chamber of Commerce and Industry held under the theme, ‘The Nigeria auto policy: The current drivers’.

The Executive Director, Truckmasters Nigeria Limited, Dr. Oseme Oigiagbe, said rather than encourage production and purchase of new vehicle sales, the enforcement of the auto policy had largely led to significant reduction in the sales figures.

He said the figures had consistently dropped from 50,000 units in 2013 to 40,000 vehicles in 2015; 20,000 in 2016 and 10,000 this year.

Oigiagbe, who stated that the Federal Government ought to have placed a total ban on the importation of used vehicles to drive new vehicles’ patronage, lamented the high interest rate on vehicle loans, ranging from 25 per cent to 27 per cent.

The Executive Director, Kewalram Chanrai Group, Mr. Anil Sahgal, also put the total figure of new vehicles sold this year at 10,000 units, stressing that without the support of the government for the automobile assemblers, the industry would not make any headway.

The Executive Director, Nigerian Automotive Manufacturers Association, Mr. Remi Olaofe, said many of the auto assemblers were merely producing vehicles and dumping them in warehouses as a result of low patronage.

The Managing Director, VON Automobile Limited, Mr. Adetokunbo Aromolaran, who described the situation as pitiable, said there was no way the nation could make progress if the government continued to buy imported fully built vehicles.

“The government remains the biggest buyer, and it has to lead by example by buying made-in-Nigeria vehicles. The auto business is demand-driven; once volume grows, the cost of production will drop and vehicle prices will come down. There is also the need to create viable vehicle finance schemes,” he stated.

The Managing Director, National Trucks Manufacturers Limited, Mr. Ibrahim, Bayero, said, “Majority of us have been recording losses in the last five years due to poor sales.”

He criticised the granting of licences by the government to 53 auto firms to assemble vehicles in Nigeria, saying, “It does not make economic sense,” and warned that without sincerity, the auto policy would not achieve its desired goals.”

About the Author

Samed Olukoya
Samed Olukoya is the CEO/Founder of investorsking.com, a digital business media, with over 10 years' experience as a foreign exchange research analyst and trader. A graduate of University of East London, U.K. and a vivid financial markets analyst.

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